FCC Net Neutrality Flip-Flop: Wrong on the Facts, Wrong on the Law

Statement on the Publication of the FCC Flip-Flop on Network Neutrality Order

February 22, 2018
| Press Release

Washington, D.C. – The following statement of Mark Cooper, Senior Fellow at the Consumer Federation of America (CFA) outlines the CFA’s response to the publication of the FCC Network Neutrality Order:

The Internet was born and thrived for three decades under an FCC policy ensured one of the central principles that governed telephone service would apply to the transmission of data – non-discriminatory access to the means of communications. It did so under its broad powers of Title I of the Communications Act of 1934, but that approach was rejected by the courts and might not have been adequate to oversee digital networks as they become the primary means of communication. In 2015, the FCC revived the lite-handed approach to ensuring non-discriminatory access to the communications network by asserting Title II jurisdiction, which the court upheld.

Regardless of what you think about Title I v. Title II, one thing is certain, “Title 0,” is inadequate to prevent the anticompetitive, anti-consumer abuse of market power that the network owners will have a strong incentive and ability to impose on consumers and “over-the-top” services providers.

The FCC’s flip-flop on network neutrality is not only wrong on substance, it is wrong on process. Unable to build a record that would support this radical deregulation, the agency simply invented a new theory. But, the Administrative Procedure Act, demands decisions bear a clear relationship to an empirical record before the agency that is a reasonable representation of reality. Failing that, as this flip-flop does, the rule must be found to be arbitrary and capricious and vacated. We have already made this argument in an amicus brief filed in the FCC’s Business Data Services “flip-flop.”

As the inevitable court challenges to the network neutrality “flip-flop” unfold in the months ahead, our analysis will show that theory is not only contradicted by the record, but it is also at odds with the economic literature that has developed over the past three decades. This literature shows strong concern about the abuse of market power in industries that have been deregulated and remain highly concentrated, and even greater concerns about digital platform industries in which bottlenecks and chokepoints magnify the incentive and ability to abuse market power.